Africa’s economic recovery is the key to global growth

We cannot enjoy a complete global economic recovery if the main engine of future economic growth – Africa – does not recover. With that in mind, French President Emmanuel Macron held a summit on financing African economies in Paris on Tuesday.

President Cyril Ramaphosa attended the summit with representatives from 28 other African countries, China, China, France, Germany, Italy, Portugal, Spain, the Netherlands, the United Kingdom, the United States, Saudi Arabia and the United Arab Emirates. Ramaphosa made strong statements at the summit about Africa’s vision for economic recovery, thus framing the agenda.

The summit came as a culmination of the efforts that Ramaphosa started last year when he was president of the African Union, when he appointed special economic envoys to communicate with international financial institutions about the economic challenges facing the African continent and to mobilize support. As president of the African Union, Ramaphosa sought a strong and comprehensive economic recovery in Africa after the COVID-19 pandemic.

According to Senegalese President Macky Sall, African countries will face spending deficits of $ 285 billion (about 4 trillion rand) over the next two years. One of the summit’s top priorities was getting countries to close the $ 19 billion financing gap for this year.

The sharing economy in Sub-Saharan Africa shrank 1.9 percent last year – the worst contraction on record. African companies are struggling to get financing and cut hiring by 8.5 percent, which put 17 countries in debt crises last year. Ways must be found to support small and medium-sized enterprises in Africa, including through loan guarantees.

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The International Monetary Fund (IMF) estimates that additional financing of up to $ 285 billion will be required by 2021-2025 for African countries to step up spending response to the pandemic, nearly half of which for low-income African countries. Middle-income countries also need special attention. Without collective action, the financing and goals of the 2030 Agenda for Sustainable Development and the African Union’s 2063 plan are at risk.

Participants at the summit discussed the issue of debt relief and support for African countries from the International Monetary Fund through special drawing rights. African leaders have urged the International Monetary Fund to transfer $ 100 billion in IMF Special Drawing Rights reserves to Africa by October.

Ultimately, the summit called for a speedy decision and implementation of an unprecedented global allocation of special drawing rights to the International Monetary Fund, which is expected to reach $ 650 billion, including $ 33 billion to increase the reserves of African countries, and urged countries to do so. Benefit from these new resources with transparency and effectiveness.

To alleviate the suffering of African economies from weak external government debt, G20 creditors and the Paris Club stated that they are acting in accordance with the agreement contained in the CIB’s G20 statement in April and in the joint framework of the Debt Service Suspension Initiative (DSSI). Agreed. In November last year.

The summit welcomed the ambition to develop the Africa Entrepreneurship Alliance to help mobilize all partners, from the public and private sectors, to support African private sector development – through financial and technical resources and capacity building.

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One particularly important outcome of the summit was a call for vaccine patent applications in Africa to enable vaccine production on the continent. President Ramaphosa stressed the need to temporarily waive the regulations of the TRIPS Agreement, and the need for other countries to support this so that Africa can independently produce vaccines. Minister Nalidi Bandur, who accompanied the president at the summit, said the waiver could be a prelude to greater African capacity to produce batches of vaccines.

France has shown great interest in partnering with vaccine manufacturers in South Africa to increase South Africa’s vaccine production capacity. President Macron has made clear his goal of vaccinating 40 percent of people in Africa by the end of this year. “The current situation is not sustainable, it is unfair and ineffective,” Macron said. Macron warned that failure to vaccinate Africans threatens to emerge and spread potentially dangerous variants.

We must also, in partnership with the private sector, accelerate vaccine production by developing local production capacities in Africa. The summit concluded that this could be facilitated through the voluntary participation of intellectual property and the effective transfer of technologies and knowledge, in accordance with international legal frameworks. Such as entering into licensing and manufacturing agreements to enable local production. “

On the sidelines of the summit, President Ramaphosa met with the Presidents of Angola, Ivory Coast, Rwanda, Mozambique and the Democratic Republic of the Congo. Leaders talked about the urgency and status of the vaccination programs, but the main issue for most of them is the economic recovery and stimulus package to support their economies in recovery.

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Macron plans to pay a state visit to South Africa at the end of this month, when the issues discussed at the summit deepen.

* Shannon Ibrahim is foreign affairs editor for Independent Media Group.

Megan Vasquez

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